Markham Town Council votes 11-2 in favor of finacial framework for 20,000-seat GTA Centre

Ken Campbell
2012-04-27 01:20:00

The biggest obstacle facing the builders of a new 20,000-seat rink that could ultimately attract an NHL team to suburban Toronto is that it will not turn into Glendale North.

And they managed to do that Thursday night when Markham Town Council voted 11-2 to approve a financial framework for the rink, stickhandling around concerns that taxpayers might be left on the hook for the Markham Sports, Entertainment and Cultural Centre (corporate name to follow), a $325 million building that has no guarantees it will ever attract an NHL team.

Graeme Roustan, the chairman of hockey equipment giant Bauer and the driving force behind the facility, pointed out that all cost overruns would be covered by his group. And while the town will be responsible for coming up with $162.5 million, the money will be recouped with surcharges on events in the building and by private developers who will pay up to $6,500 per townhouse that is constructed in one of Canada’s fastest growing communities.

Roustan and his group clearly assuaged the town’s council, which will now enter into final negotiations that could lead to shovels going into the ground by this summer. It’s being projected that the GTA (Greater Toronto Area) Centre will open in the fall of 2014, in time for the 2015 World Junior Championship that Roustan has already applied to host. Once built in 2014, ownership of the building would go to the Town of Markham, who will in turn lease it to Roustan’s group, likely on a 49-year lease.

Now Roustan’s group and the town will set about negotiating the parameters of the deal, a process that will likely take another four-to-six weeks. Prior to voting on the motion, there was a motion to defer the original motion by 60 days, but it was defeated by an 11-2 margin.

That did little to comfort some residents who want their council to slow down the process and to have an ironclad guarantee that taxpayers will not be left paying bills or being saddled with a white elephant of a facility if it doesn’t work.

“I refuse to pay one extra dime in taxes to this NHL arena,” said one resident who addressed council at the meeting.

If the good people of Markham have any questions about this facility, all they have to do is look at the mess that has become the Phoenix Coyotes. It’s a legitimate question, of course, since Glendale’s foray into big-league sports has been ruinous to the town, forcing layoffs, service cuts and tax increases to keep a team that very few people seem to want to watch.

“Taxpayer dollars were used for that facility,” Roustan said. “That’s the biggest difference between Glendale and here.”

This corner has gone on the record a number of times steadfastly against any public money being used to construct monuments to the rich that house NHL teams, the way they are going to be used to build new NHL rinks in Quebec City and Edmonton. Roustan’s group has maintained throughout the process that it will not call upon taxpayers to fund the building and it seems as though the town council took him at his word.

The town’s chief administrative officer said the worst-case scenario would see taxpayers paying a two-percent increase in property taxes over seven years, with the final year costing taxpayers an additional $160 dollars. That would be assuming the project is a failure financially and there is no additional growth in the city.

Now comes the inevitable wait for an NHL team to occupy the building. (“I’m looking forward to watching the Markham Chargers defeat the Toronto Maple Leafs,” one councilor said.) Roustan has insisted a couple of things on this count. The first is that an agreement with LiveNation, which is one of Canada’s largest concert promoters, ensures the building can be self-sufficient without an NHL tenant. The second is that at no time in this almost two-year process so far has he been given any assurance by the NHL that a team will ever be forthcoming.

That has prompted one consultant hired by Markham to insist that the town negotiate a clause that would cancel the GTA Centre’s lease agreement with the town if it doesn’t land an NHL team within a certain period of time. That is still to be negotiated, but it’s believed to be a non-starter for Roustan’s group.

And make no mistake. While Roustan and his group have gone out of their way to convince everyone that the facility can survive without an NHL team, getting either an expansion or existing franchise is the ultimate goal here. But Roustan cannot come out and express that without looking like Jim Balsillie, whose bold proclamations were part of the reason he did not get the NHL board of governor approval.

Silence is golden when it comes to NHL commissioner Gary Bettman and the board of governors and you can bet that Roustan and his group will play ball with the NHL and wait their turn, however long it takes. But Roustan knows full well that the odds of getting an NHL franchise would rise astronomically if there were a ready-made NHL building available.

After all, that was the most prominent factor in the Atlanta Thrashers moving to Winnipeg last summer. The possibility that another team does just that and moves into the most fertile and under-serviced hockey market in the world has just become that much closer to reality.